If the Sales Mix Shifts to Four Units of Product

question 25

Multiple Choice

If the sales mix shifts to four units of Product A and one unit of Product B,then the break-even point will:

• A)stay the same.
• B)decrease.
• C)increase.
• D)be indeterminable.

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Definitions:

Indirect Costs

Expenses not directly tied to a specific project, product, or activity, such as administrative salaries and facility maintenance.

Office Equipment Depreciation

Office equipment depreciation is an accounting method to allocate the cost of office assets over their useful lives for reporting their wear and tear, usage, or obsolescence.

Factory Overhead

The total of all costs that are incurred to manufacture products, excluding the direct costs of labor and materials.

Sales Supplies Used

Pertains to the total cost of sales or promotional materials consumed or utilized during a particular period.